Bira's name change cost it Rs 80 crore and worsened its losses before its planned IPO

B9 Beverages Ltd., the maker of Bira 91 beer, faced a major financial setback due to a name change, leading to Rs 80 crore in product write-offs and a significant revenue decline ahead of its planned 2026 IPO.

Name Change Disrupts Operations

Previously known as B9 Beverages Private Ltd., the company removed "Private" from its name to align with its public listing ambitions. However, this seemingly simple change resulted in prolonged compliance hurdles, disrupting sales and causing a 22% drop in revenue for the fiscal year ending March 2024.

Founder’s Statement

Founder Ankur Jain explained the impact: “Due to the name change, we had to go through a 4-6 month process of re-registering labels and re-applying across states. This caused a sales halt for several months, despite strong demand.”

Additionally, Jain pointed out that regulatory changes in Delhi NCR and Andhra Pradesh—markets contributing over a third of Bira’s total sales—further worsened the situation.

Financial Losses Mount

As a result, B9 Beverages reported a net loss of Rs 748 crore in FY24, marking a 68% increase from the previous fiscal year. This exceeded total sales revenue, which stood at Rs 638 crore. Bira’s sales volume also declined, dropping from nine million cases in the previous year to around six or seven million cases. The Rs 80 crore loss stemmed from unsold inventory bearing the old company name, which had to be written off.

Optimism for Recovery

Despite these setbacks, the company expects a turnaround. “We anticipate making an operating profit by next quarter. Growth has resumed since Q3, and we have the scale to raise capital by 2026,” Jain stated.

Increasing Competition in Indian Beer Market

The Indian beer industry is witnessing rising competition, with microbreweries, craft brands like Simba and BeeYoung, and premium foreign brews expanding their presence.

Vinod Giri, Director General of the Brewers Association of India, emphasized the importance of maintaining a distinct craft beer identity. “While craft brands complement mainstream beer, they must strike a balance between investor expectations and sustainable consumer growth,” he noted.

Industry Giants Expand Investments

Meanwhile, industry leaders continue to invest in India. United Breweries, owned by Heineken, recently announced a Rs 750 crore investment in a new brewery in Uttar Pradesh, marking its first greenfield project in a decade. Similarly, Carlsberg plans to increase its India investments in 2025.

For B9 Beverages, the disruption caused by a name change has proven costly—both financially and in terms of market share—at a time when Indian consumers are increasingly exploring craft beer alternatives.